Arizona’s bet on universal school choice is already paying off. At the same time that enrollment in the state’s Empowerment Scholarship Account (ESA) program is surging, the state’s revenue surplus has gone through the roof.
In the first four months of 2023 alone, enrollment in Arizona’s ESA program has soared by 7,000 students, bringing the total number of children served to over 51,000. And now, new data released this past week by the nonpartisan Joint Legislative Budget Committee (JLBC) show that over a similar period, the state’s estimated revenue surplus has surged by an extra $750 million, putting the total state budget surplus this year at $2.5 billion.
Before Arizona’s historic universal ESA expansion took effect, just 12,000 students were participating in the program. This means that during the first school year where every family in the state can use their child’s public education dollars to customize that student’s schooling, nearly 40,000 new students have received ESA support for private or at-home learning opportunities. And all this is happening as state coffers have overflown with over $1 billion dollars more in revenue than originally forecast.
Sources: Arizona Joint Legislative Budget Committee (JLBC) FY 2023 Appropriations Report: $1,077,036,700 projected FY 2023 ending balance based on enacted budget. Arizona JLBC Finance Advisory Committee April 2023 Briefing Materials: $2,530,157,100 projected FY 2023 ending balance (revised). Arizona Department of Education ESA Program 2022 Quarter 4 Report: 12,127 ESA students. Arizona Department of Education ESA Program Homepage as of April 17, 2023: 51,849 ESA students.
Indeed, this extraordinary economic momentum comes in the wake of Arizona enacting the nation’s first fully universal ESA program. Sponsored by state Representative Ben Toma and signed into law by former Governor Doug Ducey last summer, the new legislation took effect in September 2022.
Since then, leftwing activist organizations such as Save Our Schools (SOS) Arizona have attempted to portray the program as financially ruinous. Yet this same organization—whose leaders were forced to admit that they had miscounted the number of signatures they collected in opposition to the program last fall by more than 50,000—has again opted for partisan wish-fulfillment rather than numerical reality.
With a typical ESA scholarship award around $7,000 per student—that is, about half of the roughly $14,000 spent on average per student in a public district school—the ESA program now serves roughly two kids for the cost of each one in a traditional public school district.
Unsurprisingly, when compared to the roughly $15 billion now spent each year on Arizona public schools, the ESA program makes up only a sliver of total K-12 spending. Scholarship awards for students who’ve joined the program under the universal ESA expansion amount to roughly 2% of the total spending on public school students. In fact, despite claims by SOS and other opponents of school choice that ESAs have drained public schools of funding, state lawmakers increased ongoing public school funding by more than $600 million in the same year that the universal ESA expansion took effect.
In short, the ESA program makes up only a small share of the state’s spending on education, but with over 50,000 participants and growing, it will continue to provide a lifeline for all students in need. It’s already done just that for students with special needs and other vulnerable populations ever since Goldwater created the nation’s first ESA program in Arizona more than a decade ago—delivering life-changing results at lower costs than public school offerings.
Despite such real-world impacts on families, critics have doubled down to suggest that the program’s success is a sign of failure and financial unsustainability. Indeed, teachers union-aligned groups have suggested that because more students have opted into the ESA program than originally estimated, it must be too expensive. (Note the sharp contrast to their usual take on education spending, which is only ever portrayed as an investment, rather than a cost.)
It is true that demand for ESAs has already beaten initial estimates, and it is true that the expansion, which passed in the final days of last year’s legislative session, was enacted separately from the state budget—meaning ESA awards were not incorporated into the projected costs of the original budget. But ESA award amounts have already been factored into the state’s updated budget projections released this January for the current and upcoming fiscal year. In fact, it’s the very same state budget analysts who assume that the program will grow even further to 57,000 students by the end of this school year who also report the state is now sitting on a $2.5 billion cash surplus for next year. (Of note, that surplus is in addition to the state’s $1.4 billion rainy day fund, which former Governor Ducey and conservative lawmakers also accumulated to cushion the state from any future economic turbulence.)
The state budget analysts were characteristically cautious in their recommendations to spread out the massive war chest. They suggested that if all $2.5 billion were spent this year, the state budget would simply break even next year, before the balance increases again to an estimated $600 million surplus by 2026. But in any case, their projections make clear that the same Arizona lawmakers who unleashed universal school choice have helped steward robust economic vitality and have created a situation where Arizona lawmakers are again weighing how best to spend or return excess tax revenues. Indeed, as the JLBC analysts reported in January—even before the latest upward revisions—the state has enjoyed “an increase of $1.06 billion over the original revenue estimate included in the FY 2023 budget enacted in June 2022” due to “significantly stronger revenue growth than originally projected.”
There is no doubt that global financial uncertainty, the risk of fiscal and monetary mismanagement from Washington D.C., and warnings of mild or severe recessions should perennially weigh on the minds of state legislators. But when it comes to ESAs and the state’s financial solvency, one thing is clear: universal school choice and successful economic stewardship easily go hand in hand.
Arizona has just proven it.
Matt Beienburg is the Director of Education Policy at the Goldwater Institute. He also serves as director of the institute’s Van Sittert Center for Constitutional Advocacy.
Arizona voters are asking lawmakers to lead on Empowerment Scholarship Accounts (ESAs), and their voices just got louder.
The state’s ESA program—which allows families to use a portion of the state dollars allotted for their children to pay for private tuition, tutors, and other teaching tools—has transformed thousands of lives both before and during the pandemic. For years, the testimonies of parents have been nothing short of remarkable:
As one mother put it this past year to members of the State Board of Education, “ESA saved my son from a path that would have compromised him on a systemic level…”
From another mom: “I am a parent of three children on ESA, but I also have a master’s degree in elementary education, and ESA has saved the educational lives of my three children…. We have tried public, private, and charter schools… [and] my child was able to meet some of her IEP [Individualized Education Program] goals in four months that no school had helped her to achieve in four years.”
And from a mother in rural Arizona: “I want all to know that this ESA option to educate my children truly saved my family; my oldest has significant disabilities and she attended our public school through her ninth grade year… So many years were spent advocating and begging and pleading for her to be educated, and more importantly, even wanted… ESA has opened up our world to educational opportunities never to be found in the public school setting…”
Now, Arizona lawmakers are on the cusp of extending this same opportunity to thousands more children via SB 1452, which would provide ESA eligibility to low-income and veteran families.
Right now, only special needs students and select other groups, such as children whose parents are on active duty or were killed in the line of service, are eligible to participate in the program. But as Gaby Friedman of the Torah Day School testified to lawmakers in March 2021, the impact of ESAs on kids at her school has shown the need to give the same opportunity to even more families:
“Maya (not her real name) is six, comes from a low-income family, and is disabled…Maya is eligible for the ESA because she is a special needs disabled student…What I thought her story shows is that an ESA works for an individual child…Maya is not the only one with unique needs. There’s many parents out there… and their children aren’t getting the education that they want. Those children might be not disabled…but they need more than what they’re getting. And that’s why this bill is so important.”
Arizona voters increasingly agree.
Multiple recent polls have found overwhelming bipartisan support across Arizona for increasing access to ESAs. Now, a new Goldwater Institute poll has again found massive support among both rural and metropolitan regions of the state. The poll, which was conducted in March and April 2021 across three separate legislative districts (LD4, LD13, and LD25), found that over two-thirds of all respondents, including 70% of Democrats, 67% of Independents, and 71% of Republicans, voiced support for extending program eligibility to all low-income students in Arizona. In contrast, out of the overall sample (N=641), just 21% of voters opposed increasing ESA eligibility.
Conducted March 29– April 6, 2021. N=641. Margin of error <6%. Results above exclude respondents who identified their political affiliation as “Other.”
Union organizers and district superintendents may have the bigger megaphone and messaging apparatus, but our education system ultimately exists to serve Arizona students and their families. Especially in the wake of COVID-19 and the academic disruption unleashed by public school shutdowns over the past year, that truth seems increasingly clear to voters. May it be equally clear to Arizona’s policymakers.
This article was published by the in defense of liberty blog on April 14, 2021, and is reproduced with permission from the Goldwater Institute
